Common mistakes made by landlords

Investing in rental property has long been considered a solid wealth-building strategy and, especially in times of economic uncertainty, is considered a safer investment than other less tangible options.

- PROPERTY WRITER

"It can be an excellent all-round investment that offers consistent cash flow in the short-term, long-term appreciation, tax advantages and the potential for passive income down the line, and with the right property and management approach, landlords can see significant returns," says Lorraine Dellbridge, rentals manager for Lew Geffen Sotheby's International Realty in the southern suburbs, Noordhoek and False Bay.

"However, as with any investment, rental properties come with their share of risks and one of the biggest dangers for new and even experienced landlords is making avoidable mistakes that can cost thousands of rands and even jeopardise the investment so understanding these pitfalls is key to protecting your bottom line and achieving long-term success."

Ms Dellbridge shares the following common costly mistakes landlords make — and how to avoid them:

1 Failing to screen tenants properly

Rushing to fill a vacancy without thorough screening is a recipe for disaster. Problem tenants can cause property damage, miss rent payments or even become difficult to evict and many landlords regret not conducting thorough background checks, credit history reviews and verifying employment and previous landlord references. The best way to avoid this potentially disastrous situation is to use a reputable property management company that will have access to multiple screening channels and will also assist and manage the situation if an issue does arise. However, if you opt to manage your own property, then it’s essential to use a consistent screening process for all applicants and invest in tenant screening tools or use a professional service that can check credit, criminal records and rental history. A few days of diligence can save months of stress and financial loss.